Soo Lin, the Sole Stockholder, Began an Internet Consulting Practice

question 220

Essay

Soo Lin, the sole stockholder, began an Internet Consulting practice organized as a corporation and completed these transactions during April of the current year: $\begin{array}{llcc} \text { April } & \text {1\quad Invested \( \$ 100,000 \) of her personal savings into a checking }\\& \text {\quad account opened in the name of the business. } &\\ &\text {2\quad Rented office space and paid \( \$ 1,200 \) cash for the month of } &\\& \text { September. } &\\& \text { 3\quad Purchased office equipment for \( \$ 30,000 \), paying \( \$ 8,000 \) cash } &\\& \text { and agreeing to pay the balance in one year. } &\\& \text { 4\quad Purchased office supplies for \( \$ 750 \) cash. } &\\ &\text {8\quad Completed work for a client and immediately collected } &\\& \text { \( \$ 2,700 \) cash for the services. } &\\& \text { 15\quad Completed \( \$ 3,600 \) services for a client on credit. } &\\& \text {20\quad Received \( \$ 3,600 \) from a client for the work completed on } &\\& \text { September 15 . } &\\ &\text {30\quad Paid the office secretary's monthly salary, \( \$ 3,000 \) cash. } &\\& \text { 30\quad The corporation paid a \( \$ 2,000 \) dividend.} &\\\end{array}$
Show the effects of the above transactions on the accounting equation of Soo Lin, Consultant. Use the following format for your answers. The first item is shown as an example.
Increase = I Decrease = D No effect = N $$\begin{array} { | c | c | c | c | } \hline \text { Date } & \text { Assets } & \text { Liabilities } & \text { Equity } \\\hline \text { Example: } & & & \\\hline \text { Apri 1 } & \text { I } & \text { N } & \text { I } \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline\end{array}$$

Differentiate between cash flows from operating, investing, and financing activities.

Identify positive and negative cash flow effects from changes in balance sheet items.

Use the direct and indirect methods for reporting cash flows from operating activities.

Recognize transactions that influence cash flow but do not affect the income statement.

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Definitions:

Junk Food

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Psychological Needs

Fundamental emotional or mental requirements necessary for wellbeing and effective functioning of an individual.

Horney's Theory

A psychoanalytic theory by Karen Horney focusing on social and cultural factors affecting personality, introducing the concepts of basic anxiety and neurotic needs.